According to World Bank’s Ease of Doing Business Index 2016, India is a country where credit is not available easily. This is especially in the case of small business owners. It hardly needs to be mentioned that most small business owners face bottlenecks in securing financing for their businesses. The prudent approach is to be smart and efficient in making use of the available funds through quick business loan Bajaj or other ways of financing. If you have managed to get a small business loan it is just half the battle won. The real challenge of running a small business is putting the funds to the best possible use so that it ensures healthy return on investment for your business. Two questions should be asked before you get the finance you want-
- How will I use the loan?
- How am I going to pay it back?
It should always be kept in mind that the latter is largely determined by the former. You should have a well thought-out plan on how you are going to use the small business loan. The following are some of the ways to make the most of the loan-
- Buying inventory- It goes without saying that one needs credit to purchase stock and product. This type of funding is great as it serves as its own source of collateral. If your business is undergoing seasonal fluctuations or if it needs to take advantage of short time periods to sell a higher amount of product to satisfy immediate supplier payment terms, this can be your feasible solution.
- Expanding the business- be it the development of new products, investment in new markets, or building or moving into new premises, expansion of a business can be of different forms. Raising our productivity can also mean expanding your workforce and investing into research and development. Likewise, building or moving into new premises is accompanied by relocation costs and purchasing new equipment.
- Capital and investment- often, acquiring additional funding to attain your business aspirations can get pretty difficult. It can either involve buying fixed assets such as machinery and plant or just aligning the business and acquiring the expertise it needs to further its own business objectives.
It can hardly be denied that capital investment is the bedrock of long-term finance. This finance is used to future-proof business operations and pave the way for expansion.
- Refinance and debt consolidation– After all, borrowing money from a wide range of different lenders is not usually as economical as having it in the form of a single loan, with a single repayment. Consolidating debt often includes reduction of repayment and reaping the benefits of lower rates.
- Soft costs- As opposed to “hard” physical assets or products, soft costs are the expenses that do not directly help create a product or provide a service. However, these are necessary to keep your business functioning in a smooth manner. These include, licenses, marketing campaigns, and professional fees. It also covers fees for advisors lie CPAs, attorneys, and bankers.
- Payroll and hiring- it goes without saying that a company is only as strong as the people behind it, and it is always a good idea to invest your new business loan in hiring. According to experts, the growth of a business is incomplete without employees who can take over some tasks such
as bookkeeping or ordering supplies, thus supporting the daily functions.
Small businesses can avail various types of loan for business, including invoice/bill discounting, working capital loans, secured term loans, loans against property, loans against property, machinery loans, medical equipment financing, and so on. However, small business owners should keep in mind that any NBFC, bank or financial institution is very cautious before granting approval to any loans. Bajaj Finserv is your go-to solution if you are on the lookout for financing with a low business loan interest rate, Flexi-Loan facility, hassle-free approval, and online account access. With Bajaj Finserv by your side, you need to fret about propelling your business to greater heights, with collateral-free unsecured loans of up to Rs. 30 lakh.